Sonoma County Open Space Authority Annual Audit Report 2008

Sonoma County Auditor Controller Treasurer Tax Collector [phone]

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• Langue: English

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    SONOMA COUNTY OPEN SPACE AUTHORITY   ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2008          

RODNEY A. DOLE SONOMA COUNTY   AUDITOR - CONTROLLER   TREASURER - TAX COLLECTOR

     

SONOMA COUNTY OPEN SPACE AUTHORITY   Annual Report For the Fiscal Year Ended June 30, 2008     T A B L E O F C O N T E N T S

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    Auditor-Controller’s Report   Management’s Discussion and Analysis   .............................................................................. 1 – 6   Basic Financial Statements:  Government-wide Financial Statements:  Statement of Net Assets ........................................................................................... 7  Statement of Activities ............................................................................................. 8  Fund Financial Statements:  Balance Sheet – Governmental Fund ....................................................................... 9  Statement of Revenues, Expenditures, and  Changes in Fund Balance – Governmental Fund .................................................. 10  Reconciliation of the Statement of Revenues,  Expenditures and Changes in Fund Balance of the  Governmental Fund to the Statement of Activities ............................................... 11     Notes to the Basic Financial Statements .............................................................................. 12 – 22   Required Supplementary Information................................................................................... 23   Roster of Board Members   .................................................................................................... 24      

 

Auditor-Controller’s Report

                          Board of Directors Sonoma County Open Space Authority Santa Rosa, CA             We have audited the accompanying financial statements of the Sonoma County Open Space Authority, (the Authority) as of and for the year ended June 30, 2008, which collectively comprise the basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Authority’s management. Our responsibility is to express an opinion on the financial statements based on our audit.   We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.   As described in Note IV.B of the Notes to the Basic Financial Statements, the Auditor-Controller is mandated by various statutes within the California Government Code to perform certain accounting, auditing, and financial reporting functions. These activities, in themselves, necessarily impair the auditor's independence. However, we believe adequate safeguards and divisions of responsibility exist.   In our opinion, except for the effects, if any, of the impairment to auditor independence, the basic financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of June 30, 2008, and the respective changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

  The Management’s Discussion and Analysis (MD&A) on pages 1 through 6 and the budgetary comparison information on page 23 are not a required part of the basic financial statements but are supplementary information required by the Government Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.       May 14, 2009    

 

Management’s Discussion and Analysis

    As management of the Sonoma County Open Space Authority (the Authority) we offer readers of the Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30, 2008. We encourage readers to consider the information presented here in conjunction with the Authority’s basic financial statements (pages 7 - 11) and the accompanying notes to the basic financial statements (pages 12 22). -     Financial Highlights   •   The assets of the Authority exceeded its liabilities at the close of the most recent fiscal year by $61,578,335 (net assets). Of this amount, $59,852,503 (unrestricted net assets) may be used in implementing the Agricultural Resources and Open Space element of the Sonoma County general plan and to further the State policy on open space preservation.   •   The Authority’s  Thistotal net assets increased by $17,590,026. increase is a result of revenues exceeding expenses in the governmental activities.   •   As of the close of the current fiscal year, the Authority’s governmental fund reported an ending fund balance of $61,493,657, an increase of $17,565,337, in comparison with the prior year. Approximately 85 percent, $52,194,912, of this total amount is available for spending at the government’s discretion (unreserved, undesignated fund balance).   •   At the end of the current fiscal year, unreserved, undesignated fund balance for the general fund was 1,351 percent of the total general fund expenditures of $3,860,514.       Overview of the Financial Statements   This discussion and analysis is intended to serve as an introduction to the Authority’s basic financial statements. The Authority’s basic financial statements comprise four components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.   Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the Authority’s finances, in a manner similar to a private-sector business.   The statement of net assets presents information on all of the Authority’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating.     The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the

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underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes). The government-wide financial statements can be found on pages 7 – 8 of this report.   Fund financial statements. Agrouping of related accounts that is used to maintain fund is a control over resources that have been segregated for specific activities or objectives. The Authority, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The Authority’s funds are governmental funds.   Governmental funds.Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.   Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.   The Authority uses governmental funds to account for its activities, which include the preservation of open space in the Authority's boundaries. The Authority adopts an annual appropriated budget for its funds. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget.   The basic governmental fund financial statements can be found on pages 9 – 11 of this report.   Notes to the basic financial statements.The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 12 – 22 of this report.             Government-wide Financial Analysis  

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As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the Authority, assets exceeded liabilities by $61,578,335 at the close of the most recent fiscal year.   By far the largest portion of the Authority's net assets (97 percent) is in its cash and investments.  

Current and other assets Restricted Assets Capital assets Total assets

Current and other liabilities Total liabilities

Net Assets

Increase 2008 2007 (Decrease) $ 59,871,480 $ 42,296,169 $ 17,575,311  1,641,154 1,641,154  84,678 59,989 24,689  61,597,312 43,997,312 17,600,000

 18,977 9,003 9,974  18,977 9,003 9,974

 

Net assets: Invested in capital assets, net of related debt 84,678 59,989 24,689 Restricted 1,641,154 1,641,154 0 Unrestricted 59,852,503 42,287,166 17,565,337 Total net assets $ 61,578,335 $ 43,988,309 $ 17,590,026       The balance of the unrestricted net assets ($59,852,503) may be used to meet the Authority’s ongoing financing of the acquisition of land and easements.   At the end of the current fiscal year, the Authority is able to report positive balances in all categories of net assets. The same held true for the prior fiscal year.        

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Changes in Net Assets Increase 2008 2007 (Decrease)

Revenues: General Revenues: Sales and use tax Investment earnings Contribution from other governments Miscellaneous revenue Total revenues

Expenses: Program Expenses: Administration Contributions to other governments Total expenses

Increase (decrease) in net assets Net assets - beginning of the year Net assets - end of the year

$ 19,249,112 $ 19,858,790 $ (609,678)  2,054,301 2,029,738 24,563  122,438 122,438 -  - 47 (47)  21,425,851 21,888,575 (462,724)

 56,290 277,660 (221,370)  3,779,535 17,551,160 (13,771,625)  3,835,825 17,828,820 (13,992,995)

 17,590,026 4,059,755 13,530,271  43,988,309 39,928,554 4,059,755 $ 61,578,335 $ 43,988,309 $ 17,590,026

    Governmental activities. activities increased the Authority’s net assets by Governmental $17,590,026. This increase is a result of expenses exceeding revenues in the governmental activities.   Financial Analysis of the Government’s Funds   As noted earlier, the Authority uses fund accounting to ensure and demonstrate compliance with finance-related requirements.   Governmental Funds.The focus of the Authority’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Authority’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.   As of the end of the current fiscal year, the Authority’s governmental funds reported ending fund balances of $61,493,657, an increase of $17,565,337, in comparison with the prior year. Approximately 85 percent of the total amount constitutes unreserved, undesignated fund balance, which is available for spending at the government’s discretion. Of the remaining fund balance,

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12 percent is unreserved, designated for contingencies and 3 percent is reserved for ongoing projects.   The general fund is the chief operating fund of the Authority. At the end of the current fiscal year, unreserved, undesignated fund balance of the general fund was $52,194,912, while total general fund balance reached $61,493,657. As a measure of the general fund’s liquidity, it may be useful to compare unreserved, undesignated fund balance and total fund balance to total fund expenditures. Unreserved, undesignated fund balance represents 1,351 percent of total general fund expenditures, while total fund balance represents 1,592 percent of that same amount.     General Fund Budgetary Highlights   It is the practice of the Authority to budget only those expenses that are anticipated to occur during the course of the year. After budgeting for these expected expenses, the entire remaining unreserved, undesignated fund balance is budgeted under Contributions to Other Governments - Land and Easements.     Capital Asset and Debt Administration   Capital assets.The Authority’s investment in capital assets, as of June 30, 2008, amounts to $84,678 (net of accumulated depreciation). This amount represents the Authority's investment in equipment.      Additional information on the Authority’s capital assets can be found in Note III.C on page 20 of this report.   Contributions to Other Governments   Major expenditures during the current fiscal year included the following:   •   contribution of $3,779,535 to the Sonoma County Agricultural Preservation and OpenA Space District for the costs of administering the acquisition program.  

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Economic Factors and Next Year’s Budgets and Rates   •   the voter approved one-quarter percent salesPrimary funding for the Authority comes from tax imposed by the Open Space Authority. The tax is imposed for a period of 20 years ending in 2011. In November 2006 Measure F was passed by Sonoma County voters and renewed the sales tax for an additional 20 years ending in 2031. •   Based on staffing and project associated costs for administrative purposes, the budget request is adjusted annually. •   Due to the recent economic slow down the sales tax is experiencing a decline in fiscal year 2008-09. This decline may extend to fiscal year 2010-11 and beyond. This decline in sales tax revenues will affect fund availability for financing of acquisitions of the interest in land by the Sonoma County Agricultural Preservation and Open Space District.   All of these factors were considered in preparing the Authority’s budget for the fiscal year ending June 30, 2009.   During the current fiscal year, unreserved, undesignated fund balance in the general fund increased to $61,493,657. The Authority has appropriated this entire amount for spending in the 2008-2009 fiscal year budget.     Request for Information   This financial report is designed to provide a general overview of the Authority’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Sonoma County Open Space Authority, 747 Mendocino Avenue, Suite 100, Santa Rosa, CA 95401-4850.          

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